As I wrapped up my interviews with the first Cannabis company I covered for my blog here, Cannabrand, I knew there was an opportunity to cover more start-ups and the movers and shakers of the weed legalization movement in Colorado, Washington and soon to be other states. There were many other stories to be told. This new column, "The Puff Post" will focus on and cover all these types of new businesses whether they be entrepreneurial, technology, policy/lobbying, financial, product or service oriented Cannabis companies. New or established firms, join me as we take an inside look at this exciting new sector in America and the companies driving it forward.
Justin Hartfield founded an Irvine, California-based company, Weedmaps, that I came to find out is considered the "Yelp of Cannabis." He serves on the Board of Directors of the National Cannabis Industry Association, the Marijuana Policy Project (MPP) and National Organization for the Reform of Marijuana Laws (NORML), where he also serves as the Treasurer.
I found Weedmaps to be more of a Google Maps, because when you hit the Weedmaps website, you're asked whether you want to allow or deny their site your location coordinates and if you allow it, a big map pops right up of where you are and what legal medical dispensaries are located near you. Now that there's legal weed dispensaries in a couple of states, Weedmaps has become the online spot to find your smoke just like ordering Chinese food, a new sofa or that latest video game. (All of which, come to think of it, might be major requirements after smoking pot.)
Having "Weedmaps TV" and a cool Twitter-like feed, the site also reminds me of Foursquare and Twitter in that people are real-time posting what kind (or strain in the biz) of pot they are smoking with mini-reviews. Sporting names like "Blue Dream," "Casey Jones," "Jack Flash," "Skywalker OG," "Willie Nelson," "Durban Poison," "Granddaddy Purple," and "White Siberian," there is certainly no dearth of choice. I guess Yelp really is the best analogy for Weedmaps.
We interrupt this Puff Post column for the first-ever, "HuffPo Reader Puff Post Poll."
So, is this story about Weedmaps; comparing it to all the other location-based and/or social media sites? Or is it about Justin Hartfield?
This story is about Justin Hartfield because he's the motivating force behind the creation of and explosive growth of Weedmaps. Without Hartfield, no Weedmaps. It is his story that I tell here.
Though Hartfield has been featured in The Wall Street Journal (3/14/14) among many others and written opinion pieces for The Orange County Register (8/21/13), what I hope to accomplish here is a more full-throated telling of his story which will give you a better idea of who Justin Hartfield really is, as an entrepreneur and a man.
The first thing the reader needs to know about Hartfield is that he's an unabashed, unwavering and unrepentant pot smoker. He just loves the stuff and gushes about it when he talks. "I'm a longtime (pot) smoker since high school. I smoke it all the time," Hartfield told me with gleeful emphasis. "There's no way I'm ever getting a job--I smoke continuously." Hartfield has a legal medical marijuana recommendation in California, so his smoking is legal and necessary for medical reasons.
The conversation was going very well from my vantage point. Not only was Hatfield starting off with unusual and rare honesty which just sounded genuine, but he was opening up a can of worms I badly wanted to surface among the non-partaking crowd. Can somebody who smokes pot all the time be a contributing member to society? Hold down a full-time job? Possess ambition and drive to succeed? Have strong and positive relationships with others?
Now, I'm not the first one to ask these questions but I do believe I'm one of the few. Conventional wisdom has taken a firm hold on the opinions of many. Most people (sweeping generalization alert) don't even ask these questions, preferring to assume that of course, chronic weed puffers cannot do any of these things. Well Justin Hartfield, as we will see, defies this kind of uninformed logic.
While Hartfield doesn't have a traditional job in any sense of the words, he's very clearly been hard at work building several companies and positioning himself as what I would call a kind of "Steve Jobs of the Cannabis Industry."
But first, more about his weed smoking activities. "I can smoke a bowl at 11 am and be back working hard and effectively immediately," Hartfield told me proudly, I think surmising the contradiction I was hoping to surface. "I don't smoke weed anymore," he then said. Wait a minute I thought--major disconnect there, no?
"Now, I smoke butane hash oil (BHO) using a device like a small bong. It's got a small torch and heats up a nail to 900°F and I let a few drops onto it and well, it's great. In California, more than 25% of the market has switched to oil from weed; I haven't smoked weed in over two years." Isn't the oil smoker hard to travel with and doesn't it immobilize you? "Not at all, I'm going golfing with it tomorrow," he said proudly.
If Hartfield is sounding like a pretty cool guy right about now, that's because he is. He's multi-functional and has a lot of drive, you can hear it in his voice. He hasn't been 'mellowed out' by the weed too much as some are. I've wondered about this many times and this dynamic will be a frequent thread in The Puff Post. How and why does this happen? How is it that Hartfield doesn't show any reduction in his activity, drive, ambition or efficiency? "I'm extremely active and ADHD, so I'm always going. I guess it's my metabolism. Since I'm always smoking my mental and physiological tolerance is so high, it doesn't effect me as much anymore and I still function at a high level." Almost like it's more normal to be stoned than straight, I thought to myself. So this is a man who is ultimately committed to smoking his herb and being at peace with others and himself.
But he has also built a empire of pot businesses with $30 million per annum in revenue growing inexorably.
I ultimately believe that it's a very star-crossed activity is pot smoking and this is from a guy who grew up during the 60's and 70's when weed was cheap, plentiful and the coolest thing. When you try it, there are two paths one can go down.
First, you can become completely consumed by it and expand your experimentation onward (and downward) to cocaine, LSD, methamphetamine and the devilish granddaddy of them all, heroin. Choose this path, as quite a few of my affluent classmates from good homes with loving parents did, and there's nothing to look forward to, only pain, suffering and the Seventh Circle of Hell.
The second, which some modicum more of my classmates did, involves a kind of "everything in moderation," explore-much attitude. All things are possible on this path: family, friends (real friends not drug buddies), ambition, drive and success in business as well as life.
I want to be very careful here that you, the reader, doesn't get the wrong impression about Justin Hartfield. Though he's a quasi-religious, high-tech, weed smoker, Hartfield is also one of the most upbeat, educated, ambitious, sharp-minded business people and entrepreneurs I've come across. And he's very clearly in full possession of one of the "Entrepreneurial Holy Grails for Success" ... having fun and lots of it.
"Love what you do and do what you love. Don't listen to anyone else who tells you not to do it. You do what you want, what you love. Imagination should be the center of your life." --Ray Bradbury (1920-2012)
Let's go into a little of Hartfield's interesting background, shall we? Born and raised in Hawthorne, California, Hartfield was raised in the shadow of one of America's biggest shopping malls, Del Amo Mall. Coincidentally, I spent quite a bit of time there in the food court as a freshly-minted teenager living up the hill in Palos Verdes.
"When I was five," Hartfield told me, "I was given an Apple IIC and it quickly became my prized possession. I obsessed over it for a long time and became an introspective computer nerd. At 12 or 13, I got into (computer) hacking and also ... weed."
Going on to get a Computer Science degree from UCI (University of California, Irvine), Hartfield went out into the world seemingly unaware he would eventually turn into a 'marijuantrepreneur™.' (Just kidding about the trademark.)
"My first job was at an in-flight entertainment company and it was unfulfilling and so easy. I had been writing for my college newspaper, mostly sports articles and really enjoyed that, the writing of it. So I wrote a book in my spare time and then quit this job to sell it on an e-book website. When that didn't work out, I then wrote another book on sports-betting and that didn't work out either," Hartfield said, proving that in order to achieve success, we all have to fail, sometimes repeatedly.
Before he left the in-flight company, Hartfield had a seminal experience at their expense. "They needed somebody to go to India on business and I volunteered. What was supposed to be a couple of weeks there turned into a couple of months for me. I loved the culture there in Mumbai and roamed the markets, tasting the spices, meeting people and really coming to understand the Indian people." It sounded transcendental and led to Hartfield writing yet another e-book, "Zen Presence." Books not working out seemed to be a pattern for Hartfield up until this point.
Not one to give up easily, Hartfield then wrote an e-book that became very hot at the time, "The Ultimate Guide to Picking Up Girls on Facebook." The title sounded perfect, especially because Zuckerberg had an original founding mission of rating women as "hot or not" with a keen eye on taking advantage of them. But Facebook and Zuckerberg apparently didn't see the synergy and sent a cease and desist order to Hartfield to shut the book down. Hypocrites.
"I made more than $10,000 on the first weekend before Facebook shut it down," Hartfield added gleefully. So this brief, online financial success must've given the young man an idea; planted a seed, as it were: that there was big money to be made on the Internet without e-books. And, that it was just a matter of finding the right vehicle and vertical market.
Weedmaps.com was about to be sprung on the rest of the free, straight world.
Now at this time, Hartfield had a legal, medical marijuana card in California. And after some college friends told him about an online weed dispensary-locating site called "Weedtracker," Hartfield checked it out and finding a rudimentary, directory-type site, decided he could do better. "So I put up a simple site for me and my friends in 2006," Hartfield recalled.
"I started the Weedmaps website in November of 2007 and we incorporated at the end of 2009. We didn't really start to make any money until 2010. We now have more than 4 million visitors to the Weedmaps website per month and more than 2.5 million downloads on the Android/iPhone/iPad platforms. We're growing every month."
And like other gigantic Internet successes, Hartfield and Weedmaps have produced stellar sales growth. According to Hartfield, approximate gross revenues for Weedmap's first five years are:
2010 - $4 million
2011 - $12 million
2012 - $16 million
2013 - $20 million
2014 - $30 million+
The revenue model for Weedmaps is not your usual ad sales or subscription revenue strategy. Weedmaps neither charges the weed searchers or people who post weed reviews but instead has charged the dispensaries who distribute the pot for featuring them on the site and driving customers' eyeballs their way. It seems the was the precisely correct way to earn revenue, especially as everyone has had a hell of a time figuring out how to monetize their businesses on the Internet. Reference The New York Times versus The Wall Street Journal, who have both been searching unsuccessfully (more unsuccessfully for the NYT than the WSJ) for the right revenue formula.
So Weedmaps is humming right along, producing big revenues and profits for Hartfield and his partners. But he's not just sitting back counting cash, oh no.
Buying the Marijuana.com web domain for $4 million in 2011, Hartfield has created an operating/holding company of sorts, Ghost Group. "I bought the Marijuana.com domain from a guy who had it since around 1996," Hartfield said. How in the world did you afford to pay approximately one-third of your total 2011 revenue for the website? I asked. "Well, it worked out fine because we negotiated an excellent payment plan over five years which allowed up to make small payments which were much less than our monthly revenues at the time." Clever.
Mysteriously named, Ghost Group owns the Weedmaps, Marijuana.com and several others cannabis brands/websites. One can see Hartfield's brewing strategy for interlinking his interactive, Foursquare/Yelp-like Weedmaps with Marijuana.com, which looks like more of a HuffPo for weed than anything else. "Marijuana.com is the oldest marijuana site online," Hartfield told me like a proud adoptive father.
"We wanted to turn it into the Amazon.com for weed when it became legal." Which of course, it did in Colorado and Washington state on January 1st of this year. "We determined that Marijuana.com was the first entry point for a lot of people on the Internet, so as opposed to Weedmaps that is for more experienced smokers, we wanted Marijuana.com to become the education site for new people searching for a little initial information on weed. And we're focusing on the USA market first not the international one yet." For example, Marijuana.com has a page for all the different strains of weed offering more info on their effects etc.
Ghost Group also offers a neat E-Commerce, POS (point-of-sale) application for their dispensary customers' use, called "MMJ Menu."
"The cool thing about being in the marijuana business is that you get to feel morally superior all the time. People wrong you, they judge you when you smoke weed and injustice is all around. Stigmas are all around."
Will legalized marijuana succeed? "There'll be a huge backlash which hasn't even really started yet. But once the tax revenues get so big and the infrastructure like our public schools benefit and get so much better, it will succeed and the opposition will fail."
With his Twitter-like, streaming, "What Are YOU Smoking On Right Now" feed on the Weedmaps.com homepage and Weedmaps TV on YouTube, Hartfield's marketing is definitely targeted at the younger demographic. "Hip-Hop and the marijuana culture is so connected, that virtually every strain has its own popular Hip-Hop song," Hartfield said. I checked and it's true. The "Presidential Kush" strain for instance has a song, "Presidential" by Youngboodz.
So as Justin Hartfield carries on partying and having vast fun building his businesses, he still shows concern for his public image and how others in business, technology, government and society view him. I think this focus on his part, may well be one of the differentiators between a successful entrepreneur and a total slacker. "I do some calculation of my public image," Hartfield summarized genuinely, "and I always try to appear in a business suit; to look professional. I want to prove there really are business leaders who can smoke a joint and still build a billion-dollar corporation."